IDEAS home Printed from https://ideas.repec.org/a/ers/ijebaa/vviiiy2020i4p392-406.html
   My bibliography  Save this article

The Impact of Currency Fluctuations on Equity and Debt Market

Author

Listed:
  • A. Kotishwar

Abstract

Purpose: This study attended to investigate the impact of currency fluctuations on equity and debt markets. Furthermore, the study deals with investments in equity considering the currecy as rupee vs. dollar relationship. The European Central Bank has been considered for the external debt market investments considering the euro as the currency. The study mainly focused on the impact of rupee vs. dollar on equity and the euro impact on ECB for debt market investments. Design/Methodology/Approach: The tools applied are Bivariate Correlation, Ordinary least square method, ARCH model and Vector autoregressive model. Findings: The study reveals that from 2008 to 2019, the bivariate correlation result indicates that equity investments have a significant relationship with the rupee vs. the dollar. It has been observed that the euro has also a moderate relationship with the debt investments and the OLS result indicated that the euro impact on debt investments is observed to be insignificant. The ARCH result stated that the currency is having a significant effect on the fund's volatility. The VAR estimated that future equity and debt markets are expected to go up shortly. Practical Implications: The present study result stated that the rupee vs. dollaris having the impact on the equity investments but the euro impact is observed to be insignificant. Therefore, the equity investors should focus more on the rupee vs. dollar fluctuation, so that inflows and outflows of FII funds in to Indian equity market can be identified. Originality/value: The present study added the scholarly value to the equity markets with regard to the currency fluctuations effect on the equity and debt market investments. The investors of equity and issuers of ECB’s investments can consider this study for their decision making.

Suggested Citation

  • A. Kotishwar, 2020. "The Impact of Currency Fluctuations on Equity and Debt Market," International Journal of Economics & Business Administration (IJEBA), International Journal of Economics & Business Administration (IJEBA), vol. 0(4), pages 392-406.
    • Handle: RePEc:ers:ijebaa:v:viii:y:2020:i:4:p:392-406
    as

    Download full text from publisher

    File URL: https://ijeba.com/journal/595/download
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Silviu Carstina & Marian Siminica & Daniel Circiumaru & Anca Bandoi, 2015. "Country Risk Decision-Maker in Applying the Yield Cash-Flow Estimate," International Journal of Economics & Business Administration (IJEBA), International Journal of Economics & Business Administration (IJEBA), vol. 0(1), pages 1-79–89.
    2. Eleftherios I. Thalassinos & Erginbay Ugurlu & Yusuf Muratoglu, 2015. "Comparison of Forecasting Volatility in the Czech Republic Stock Market," Applied Economics and Finance, Redfame publishing, vol. 2(1), pages 11-18, February.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Malgorzata Jaworek & Wlodzimierz Karaszewski, 2021. "The Largest Non-Financial Multinational Enterprises in the World and Those in Developing and Transition Economies," European Research Studies Journal, European Research Studies Journal, vol. 0(1), pages 683-696.
    2. Kirsneh Alemu Kebede, 2024. "The Effect of Availability of Foreign Exchange and Devaluation of BIRR on the Performance of Companies in Ethiopia (Instance of Sample Company)," International Journal of Economics & Business Administration (IJEBA), International Journal of Economics & Business Administration (IJEBA), vol. 0(1), pages 99-117.
    3. Piotr Misztal, 2021. "The Size and the Main Determinants of China’s Official Currency Reserves in the Period 1990-2019," European Research Studies Journal, European Research Studies Journal, vol. 0(1), pages 568-582.
    4. Nurlina & T. Muhyiddin & Kgs & M. Sobri & Yunisvita & Liliana & Muhammad Farhan, 2017. "Fertility, Urbanization and Underemployment," European Research Studies Journal, European Research Studies Journal, vol. 0(4B), pages 600-608.
    5. Dzeina Steinberga & Inta Millere, 2017. "Solvency Evaluation, Comparing Traditional Financial Situation Assessment Methods with Information from Cash Flow Statements, Using Data from Insolvent Companies in the Republic of Latvia," European Research Studies Journal, European Research Studies Journal, vol. 0(3A), pages 246-258.
    6. Didik Susilo & Sugeng Wahyudi & Irene Rini Demi Pangestuti, 2020. "Profitability Determinants of Manufacturing Firms in Indonesia," International Journal of Economics & Business Administration (IJEBA), International Journal of Economics & Business Administration (IJEBA), vol. 0(2), pages 53-64.
    7. Alexander Mikhailovich Batkovskiy & Viktor Antonovich Nesterov & Olga Olegovna Reshetova & Elena Georgievna Semenova & Alena Vladimirovna Fomina, 2017. "Dynamic Model of Optimal Production Control in a Hysteretic Behaviour of Economic Agents," European Research Studies Journal, European Research Studies Journal, vol. 0(2A), pages 355-379.
    8. Winston Pontoh, 2016. "The Motives behind Dividend Policy," International Journal of Economics & Business Administration (IJEBA), International Journal of Economics & Business Administration (IJEBA), vol. 0(2), pages 29-40.
    9. Jerzy Rembeza & Kamila Radlińska, 2020. "Price Linkages Between Tea Markets: A Case Study for Colombo, Kolkata and Mombasa Auctions," European Research Studies Journal, European Research Studies Journal, vol. 0(2), pages 134-150.
    10. Natalya Aleksandrovna Rubtsova & Anna Vitalievna Baychik & Sergey Borisovich Nikonov & Natalia Vladimirovna Bakirova & Tatiana Valerievna Belenkova, 2017. "Structural Models of the Consumer Goods Industry in China, Turkey and Italy," European Research Studies Journal, European Research Studies Journal, vol. 0(4A), pages 632-650.
    11. Erginbay UGURLU, 2014. "Forecasting Volatility: Evidence from the Bucharest Stock Exchange," International Conference on Economic Sciences and Business Administration, Spiru Haret University, vol. 1(1), pages 302-310, December.
    12. Ramona Rupeika-Apoga & Roberts Nedovis, 2015. "The Foreign Exchange Exposure of Non-Financial Companies in Eurozone: Myth or Reality?," International Journal of Economics & Business Administration (IJEBA), International Journal of Economics & Business Administration (IJEBA), vol. 0(1), pages 54-66.
    13. Ryszard Kata & Malgorzata Wosiek, 2020. "Capital Mobility as a Reason for Credit Booms in the Eurozone," European Research Studies Journal, European Research Studies Journal, vol. 0(4), pages 718-738.
    14. Petr Mach, 2018. "VAT Rates and their Impact on Business and Tax Revenue," European Research Studies Journal, European Research Studies Journal, vol. 0(1), pages 144-152.
    15. Ali Fayyaz Munir & Shahrin Saaid Shaharuddin & Mohd Edil Abd. Sukor, 2020. "Long-Term, Short-Term and Time-Varying Profitability of Reversals: The Role of Market State and Volatility," International Journal of Economics & Business Administration (IJEBA), International Journal of Economics & Business Administration (IJEBA), vol. 0(2), pages 501-520.
    16. Sugiharso Safuan, 2017. "Exchange Rate Volatility and Export Volume: The Case of Indonesia and its Main Trading Partners," European Research Studies Journal, European Research Studies Journal, vol. 0(3A), pages 3-13.
    17. Lukasz Zieba, 2021. "Some Selected Determinants of Stock Exchange Development: Evidence from Greece," European Research Studies Journal, European Research Studies Journal, vol. 0(Special 4), pages 260-268.
    18. Andrey Nechaev & Oksana Antipina, 2016. "Analysis of the Impact of Taxation of Business Entities on the Innovative Development of the Country," European Research Studies Journal, European Research Studies Journal, vol. 0(1), pages 71-83.
    19. Dr Ireneusz Zuchowski, 2015. "Management Styles of Polish Managers," International Journal of Economics & Business Administration (IJEBA), International Journal of Economics & Business Administration (IJEBA), vol. 0(1), pages 38-53.

    More about this item

    Keywords

    Currency; equity; debt market; fluctuations; rupee; dollar.;
    All these keywords.

    JEL classification:

    • F65 - International Economics - - Economic Impacts of Globalization - - - Finance
    • G1 - Financial Economics - - General Financial Markets

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ers:ijebaa:v:viii:y:2020:i:4:p:392-406. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Marios Agiomavritis (email available below). General contact details of provider: https://ijeba.com/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.